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3 years ago

Economics ch 7 What are the 2 barriers to entry in a market

1 answer:

8 0

Two barriers to market entry may include special tax benefits to existing firms and building of a strong brand identity.

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On January 1, 2021, Clark Corporation sold an $800,000, 7% bond issued for $767,320. The bonds are to pay interest quarterly and

serg [7]

Clark Corporation's total cost of borrowing $800,000, 7% bonds issued for $767,320 for 5 years is $344,702.87.

<h3>What is the total cost of borrowing?</h3>

The total cost of borrowing includes the bond discounts and the interest expenses.

In this case, the total cost of borrowing is $344,702.87. However, this is only the pre-tax cost.

<h3>Data and Calculations:</h3>

Face value = $800,000

Interest rate = 7%

Bonds proceeds = $767,320

Bonds discounts = $32,680 ($800,000 - $767,320)

Maturity period = 5 years

Market rate = 8%

Interest payment = quarterly

Quarter interest expense = $14,000 ($800,000 x 7% x 1/4)

N (# of periods) = 20 (5 x 4)

I/Y (Interest per year) = 8%

PMT (Periodic Payment) = $14,000 ($800,000 x 7% x 1/4)

FV (Future Value) = $800,000

<u>Results:</u>

PV = $767,297.13

Sum of all periodic payments = $280,000 ($14,000 x 20)

Total Interest = $312,702.87

Total cost of borrowing = $344,702.87 ($32,680 + $312,702.87)

Thus, Clark Corporation's total cost of borrowing $800,000, 7% bonds issued for $767,320 for 5 years is $344,702.87.

Learn more about the total cost of borrowing at brainly.com/question/25599836

6 0

1 year ago

Who founded crypto currency in the world

ohaa [14]

Answer:

☁︎Satoshi Nakamoto's☁︎

Explanation:

Two months later, a paper entitled 'Bitcoin: A Peer-to-Peer Electronic Cash System' was passed around a cryptography mailing list. The paper is the first instance of the mysterious figure, Satoshi Nakamoto's appearance on the web, and permanently links the name "Satoshi Nakamoto" to the cryptocurrency.

7 0

2 years ago

The Foundational 15 [LO7-1, LO7-2, LO7-3, LO7-4, LO7-5][The following information applies to the questions displayed below.]Dieg

Pavlova-9 [17]

Answer:

See attached file

Explanation:

To obtain sales, the quantity sold is multiplied by the sale price in each of the regions.

Variable costs are multiplied by each of the quantities

Fixed costs are distributed according to what the company determined

From the difference between sales and variable costs we get the Contribution Margin. If the fixed costs are subtracted, the Segment Margin of each sector is obtained. Subtracting fixed costs that cannot be distributed, gives the Net Income.

The Fixed manufacturing overhead $ 800,000 was distributed between 40.000 units (produced units) not 35.000 (sold units)

4 0

3 years ago

Which statement is true for a short-term goal?

ELEN [110]

Answer:

I would say D because it sounds more reasonable for me

5 0

2 years ago

Coffman Company sold bonds with a face value of $1,080,000 for $1,020,000. The bonds have a coupon rate of 9 percent, mature in

Neko [114]

Answer:

Coffman Company

Journal Entries:

January 1 - Sale of Bonds

Debit Cash Account with $1,020,000

Debit Bonds Discount with $60,000

Credit Bonds Payable with $1,080,000

To record the sale of 9% bonds at a discount.

June 30:

Debit Interest on Bonds with $48,600

Credit Cash Account with $48,600

To record payment of interest on June 30.

Explanation:

1. Bonds as a financing source can be issued at par value, premium, or discount. It is issued at a discount when the interest rate is less than the market rate. The purpose of issuing them at a discount is to attract investors to purchase the bonds, which will be repaid at the par value.

2. Interest for the half-year was calculated as follows: $1,080,000 x 9%/2 since the interest is payable semiannually. This implies that the effective semiannual interest rate is 4.5%.

3 0

3 years ago